MRP

MRP

Why used Planning tools like APO or I2 ?

APO and I2 are Finite PLANNING tools. When MRP runs with APO
or I2 (or Red Pepper or Manugistics), it takes Capacity issues into
consideration. MRP in SAP R/3 Core does not, it assumes infinite capacity
available. (MRP only looks at material availablity.)

However, SAP R/3 DOES do finite SCHEDULING, which is where
the system 'dispatches" operations on a production order until it fills up the
capacity available, then moves to the next time period and dispatches until that
period is filled up. In SAP speak, that is called capacity leveling.

I believe APO should only be used in very large companies
(billions) because of the amount of master data that must be maintained, and
that data better be ACURATE, or you've wasted a heck of a lot of time. By the
way, APO stands for Advanced Planner and Optimizer tool, obviously a German sort
of name!

Differences between planning and scheduling, finite and
infinite

R/3 does planning without consideration for capacity
situations. So if MRP says you need 500 parts on 3/1/04, it schedules them all
to be built at the same time, even though you can only do 100 at a time. Assume
you have a fixed lot size of 100, you'll get 5 planned orders for 100 to start
on the same day. This is "Infinite Planning". APO would recognize that
constraint, and instead schedule out the 5 orders over time. The important part
of that is that it also will schedule out the deliveries of the components for 5
different days. This is "Finite Planning".

Now, assume old fashion MRP. It schedules all 5 orders for
the same day, and the buyers go out an get all of the components for the same
day. Then the planner realizes he can't do all 5, and manually changes the
schedule, and manually spreads out the 5 orders. The buyers will recieve
rescheduling notifications, but not until the scheduler does the manual
rescheduling. You could call this "Infinite Scheduling", but that only means the
same thing as Infinite Planning.

But, SAP has "Capacity Leveling". What that means is you run
another program after MRP (CM27 and CM28), which can be run in batch mode
overnight. (There is a ton of configuration and thinking that will be required
to do this!). The capacity leveling program will recognize the constrant at the
work center level, and fill up the first day, then re-schedule the next order to
the next available capacity, then the next order searches for available
capacity, and so on. This is called "Finite Scheduling". The problem with this
is the opposite of Infinite Planning, which is it doesn't take Material
availablity into consideration! The system will re-schedule a production order
without thinking about whether the materials will be available or not.

Finite Planning does Finite Sheduling at the same time. If
there is no capacity available on the desired date, the system looks for when
capacity IS available. Then it stops to see if Materials will also be available
(usually based on the lead-time for those components). If there is a material
problem, then the system figures out when the materials WILL be available, and
then
checks to see if capacity is available on THAT day, and if so, it blocks off
capacity, and allocates the materials for that day.